As a business owner, one of the administrative tasks that you need to know how to handle is the preparation of the payroll. If you have a team of workers, it is necessary that you do payroll every month. Most established businesses usually opt for the services of an expert when it comes to payroll preparation. The fact that you have access to limited finances means that you should do it yourself so that you can lower your operating costs. Yes, doing payroll is a stressful and complicated task, but with a few tips, you can do it right. If you choose to do it yourself, you should be careful not to make any mistakes in your paychecks. Below, you will learn a few tips on how you can prepare your business payroll yourself.
Doing payroll yourself starts by ensuring that all your employees fill W-4 forms. W-4 forms are meant for employees, whereas W-9 forms are meant for independent contractors. In the W-4 forms, your employees will get to include all their allowances. This way, they will get to pay less in payroll taxes. As a business entity, you need to inform the IRS and Federal government about your existence and tax-compliance by getting an Employer Identification Number (EIN). On the homepage of this website, you will discover more about the steps to take when applying for EIN. EIN is usually considered as the social security number of the business.
The next step is making a payment schedule that is suitable for your business. Once you have EIN and tax information documents, it is time that you pick the most appropriate day to pay your employees. There are different payment schedules that you can choose for your business. Ensure that you have the money ready on the payment date that you choose. There is also the option of involving your employees when deciding on a payment plan. The most challenging step in preparing payroll is calculating gross pay and deductions for your employees. It is the stage that you are likely to make a mistake when preparing your payroll. The good news is that you can rely on online tools to do it right. This page provides you with useful info. on how to do the calculations.
Finally, you should file your tax forms. In every payment period, the employer is required to withhold part of the pay as tax. Filling tax forms will ensure that you don’t get into problems with the IRS. Delaying in remitting and filing tax forms usually attract huge fines; hence you should do it on time. Using the ideas discussed in this guide, you will be able to prepare payroll yourself without professional assistance.